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Online Forex Course
 Online Forex Course >> Chapter 2 >> Fundamental Factors
Chapter 1
Forex Basics
Chapter 2
Fundamental Factors
Chapter 3
Technical Tools
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Lesson 4. Exchange Rates and Supply and Demand

   

This lesson explains exchange rates and the theoretic economic principles of supply and demand and how they influence rates. We also take a look at the main actors in the Forex market.

4.1Calculations of Exchange Rates
What is Being Exchanged?
Calculations of Exchange Rates
Currency Calculator and Live Rate Quotes

4.2Supply and Demand
Demand, Supply, and Equilibrium
Changes to Demand and Supply

4.3

Actors that Affect Supply and Demand
Who Comprises the Forex Market?
Exporting and Importing Countries
Foreign Investment Flows
Banks
Speculators

4.4

Central Banks
Floating vs. Fixed Exchange Rates
Intervention
Interest Rates

 

Lesson 5. Central Banks and Interest Rates

   

This lesson explains the role of central banks in setting a country's interest rates. It discusses the effects that investment and inflation play in officials' decisions. We will also take one through an example of the Forex market's reaction to central banks' actions and expectations.

5.1Introduction
Interest Rates Importance to Forex
Interest Rates Dictate Investment
Interest Rates Role in the Currency Markets

5.2The Role of Central Banks
Central Banks Set Interest Rates
Role in Fighting Inflation
Inflation and Oil
Inflation, Interest Rates and Investment

5.3

Market Reactions to Central Banks – FOMC Example
Dollar Gaining
Trend Reverses

5.4

FOMC Example Continued
Euro Uptrend Continues
Fed Official Moves Markets with Hawkish Talk

5.5

Central Banks You Need to Know

 

Lesson 6. Fundamental Analysis

   

This lesson explains what fundamental analysis is, and its importance to forex trading. We highlight and explain several macroeconomic, employment, and inflation indicators that help a trader to analyze the health of a country's economy.

6.1

What are Fundamental Factors?

6.2

Reaction of the Forex Market to a Fundamental Release
Non-Farm Employment Change Example
A Political Crisis Example
Safe Haven

6.3

Macroeconomic Indicators
GDP
Durable Goods
Retail Sales
Housing

6.4

Inflation & Inflation Indicators
Inflation & Inflation Indicators
CPI
PPI
Average Hourly Earnings

6.5

Employment Indicators
Unemployment Rate
Non-farm Employment Change
Weekly Claims
Average Weekly Claims

 

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Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Increasing leverage may increase gains or losses on any given trade.